Argentina debt default: frustration on the streets

Bloomberg’s Willem Marx reports from Buenos Aires on what Standard & Poor’s is
calling a default by the Argentine government

9:53AM BST 01 Aug 2014

Argentina’s President Cristina Fernandez de Kirchner denied the country defaulted on its debt in her first public comments since Standard & Poor’s said the nation had done just that for the second time in 13 years.

Fernandez said in a televised speech yesterday that while she’s open to further talks with hedge funds that successfully sued her government for £888m, she must defend the nation’s interests. Paying them could trigger additional claims and ruin Argentina, she said. While the country had posted a £319m interest payment for bondholders prior to the 30 July deadline, a US judge said it couldn’t be distributed because the hedge funds also had to be paid.

Argentina’s bond prices tumbled yesterday along with the country’s benchmark stock index after S&P said the blown deadline was enough to constitute default on about £7bn of debt. Officials have distinguished the episode from the £56bn default in 2001 that took place amid four straight years of economic contraction. Fernandez said a blocked debt payment doesn’t constitute a default.